Paul Abbott, the creator of Shameless and State of Play, has criticised the "disturbing level of self censorship" that sees UK dramas commissioned only in short runs.

Abbott, giving the Alternative MacTaggart lecture at the MediaGuardian Edinburgh International Television Festival, said that the UK "lacked the balls" of the US industry where runs of 20-plus episodes of dramas are commonplace.

He argued that the UK industry needs to learn to create episodes of returning drama series for just £500,000.

"We should have 26-parters on [UK] TV," he said. "We are kind of addicted to a really damaging level of safety valve now. Over the last five or 10 years everything has become safer… we haven't got the balls, got the guts, to blow the audience's tits off."

He also said that drama, which can easily cost more than £1m per episode, needed to be made more cheaply in the UK.

"I think drama is too expensive, I'm not meant to say that, but we have shot ourselves in the foot by letting it [costs] go through the roof. We can't afford it at that level, it has to come down."

Abbott said that there was a demand for good drama, that there was a rationale for commissioning longer runs of shows, but that at times audiences have not been well served in quality terms.

He added that one-off returns for Prime Suspect and Cracker which attracted big viewing figures proved that "audiences are begging for better stuff".

"We are not producing drama of a sufficiently high standard to merit its repeat value," he said. "We are keeping them passive and pacified … there is a disturbing level of self-censorship."

He added that it took eight years of Shameless before Channel 4 committed to a longer run of 22 episodes.

"We have to allow audiences to find time for affection for a series. The minute we realise anything catches on with audiences we should throw massive amounts at it, and I don't just mean my stuff."

The pool writing system for drama in the US showed a "complete lack of vanity we need to try and emulate", he said. UK drama is often authored by a single writer.

Abbott added that there was no reason once Jimmy McGovern's Cracker had been established that it could not have gone on to be developed into 20 episodes per year. "People would say that the quality couldn't have been maintained, but it could."

He said that his six part BBC1 thriller State of Play could have been 20 episodes and been delivered, if necessary, on the £500,000 an episode budget he was proposing.

He also identified the opportunity for writers to develop more programmes that had wider potential in Europe, not just a focus on the US.

Abbott said that he was currently "engineering" a project that would ideally have joint German and French financing so that it could be made in different languages at the same time.

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